EUROPE: 'The days are numbered for companies that avoid paying tax'

Chung Sung-Jun/Getty Images The European Commission has unveiled proposals for a new EU-wide rules on tax avoidance, after a week in which the tax affairs of multinational tech companies came under heavy scrutiny.

The new rules, introduced by European Commission member Pierre Moscovici at a press conference, will be legally binding, and require EU member states to "apply a mimium level of protection against avoidance ... [to] safeguard the single market." (Scroll down for more details on the measures.)

There will be no mimium taxation level, however.

Moscovici also indicated that the European Commission intends to introduce further measures for tackling tax avoidance this year. This includes the "common consolidated corporate tax base," which will require companies to file a single Europe-wide tax return.

(This is a measure that Britain opposes: The Guardian reports that treasury minister David Gauke has said that "it is a proposal still looking for a justification.")

"Let me put this in a nutshell," said Moscivi. "The days are numbered for companies that avoid paying tax at the expense of others."

There has been furious debate in Britain following the news that the UK Government has agreed to a £130 million tax bill for Google. Critics argue that this amounts to a 3% effective tax rate, and has been called "derisory" by politicians.

Apple (which, like Google, is headquartered in Ireland) is facing investigation by the European Commission over its tax affairs in Europe. Bloomberg has reported that the Cupertino company may owe as much as $8 billion in back taxes.

Speaking to The Financial Times, Apple CFO Luca Maestri said that Apple should not be made to pay any alleged owed taxes. "My estimate is zero. I mean, if there is a fair outcome of the investigation, it should be zero.

Pierre Moscivi declined to comment on Google's tax bill when asked in a Q&A session on Thursday. "We cannot comment on individual tax arrangements and agreements, not least because we have not seen the details of how the agreement was reached," he said.

But he added: "The commission is clear — all companies must pay their fair share of taxes where they earn their profits."

The EU's competition boss has said she is willing to investigate Google's tax arrangements in Britain. "If we find that there is something to be concerned about. If someone writes to us and says 'well maybe this is not as it should be' then we will take a look," Margrethe Vestager told the BBC.

Google insists it pays the proper amount of tax. In a letter to The Financial Times, Google VP of communications and public affairs Peter Barron wrote that the company pays "tax based on the value added by the economic activity of our staff [in the UK], at the current standard rate: 20 per cent."

He added: "Governments make tax law, the tax authorities independently enforce the law, and Google complies with the law."